The eight-episode Produce 101 recently ended its two-month run on Tencent Video. A spinoff of its South Korean predecessor, Produce 101 debuted on April 21 with 101 young women competing to be the best performer with the guidance of Chinese celebrity mentors.
The final 11 winners were picked by online viewers to become the lineup of Rocket Girls, a new idol group that debuted on June 23. The show caught the attention of both fans and investors.
According to the statistics published by the platform, Produce 101 drew more than 4.3 billion views in total, with 90 million mentions on the microblogging platform Sina Weibo.
The winners at each stage of competition were determined through audience votes and crowdfunding support, making fan engagement the most important factor in the idols’ success.
Business insiders said there were 21 crowdfunding support activities for Yang Chaoyue, one of the contestants, on the China-based animation, comic and game crowdfunding platform Modian.com and three on Owhat, an interactive app for fans and idols.
Crowdfunding is common in fan communities. Raised money is often be used to support idols, buying birthday gifts, albums, flower baskets and providing meals for their staff.
The market value of services related to male and female idol groups is expected to be more than 100 billion yuan.
In June 2014, Watanabe Mayou won the first AKB48 general election with 160,000 votes. One-fourth of the votes came from Chinese fans. The total amount raised was about 1.8 million yuan ($272,000). The crowdfunding amount raised for Cai Xukun, the contestant on Idol Producer, was estimated to be as much as 2 million.
According to AI Finance News, fans of Wu Xuanyi, a popular contestant on Produce 101, raised 1 million yuan ($150,955) in less than 59 minutes. The total amount raised by fans may have exceeded 10 million yuan ($1.5 million) during the finals alone.
AI Finance News estimated the money raised exceeded 30 million yuan by noon on June 23.
The “fan economy” has a variety of channels to draw in money, and analysts said they expect the core music market will reach 49.5 billion yuan ($7.5 billion) in 2020, including the revenue from digital music sales, concerts and Internet distribution. Fan contributions may account for more than 50 percent, and the scale of external derivative channels, such as movies, online dramas, online movies, variety shows, advertisements and other products, are expected to reach 50.5 billion yuan ($7.6 billion).
A number of companies are investing heavily in the idol music industry due to the assumed lasting popularity of this new idol girl group.
During the next two years, they will have to appear as group members at various activities whether to go on tour shows or meet and greet events with fans. Only after the two-year period will they be allowed to debut as an independent idol.
From last year’s Rap of China to Idol Producer earlier this year, music contest shows have attracted considerable attention and audience engagement. China seems to have entered an era of idol music.
Super Girl, also known as Super Voice Girls, was the first Chinese singing contest for female contestants to draw such fan engagement with its “text message voting.” Li Yuchun, the champion of the first season, gained 35.28 million votes in the finals alone. It was the first time Chinese business became aware of the huge market potential in the fan economy.
According to the “White Paper on Chinese Fan Economy and Lifestyle” by iResearch Consulting Group, about 95 percent of the fans were younger than 30. Almost 89 percent of fans said they would spend money on their idols throughout the year, either monthly or weekly. Another 6 percent of fans said they would spend money on idol-related products every day.
Korean or Japanese Style
The increasing influence of Produce 101 brought renewed confidence to the companies behind these girl groups.
There are two groups who benefit the most from such the talent shows: one is the artists, who win the support of potential investors and publishers, and the other is anyone who can create hot topic out of the show.
Chen Yuetian, a partner at Chenhai Capital, said the shows trying to develop new girl groups are split between the Japanese cultivation simulation model and South Korean’s trainee model.
Chen said the South Korean model is a traffic-focused product with a relatively low threshold for expenditure and fan engagement. whereas the “cultivation” approach used in Japan is more vertically oriented and leads to deeper fan commitment.
The Japanese approach appears to be the trend in the Chinese market. In 2017, Shanghai Star48 Culture Media, parent company of the girl group SNH48, took in 100 million yuan ($15.1 million) through the sale of voting vouchers.
Guojin Securities told the Wall Street News that brokerage companies headed by SM, JYP and DSP have formed a mature industrial system and profit chain after many years of exploration and trial.
Compared with the traditional model, the Korean model is more diversified in its earnings channels. High reproducibility and substitutability makes it a more stable business model.
So-called “B-side payments” mainly refers to revenue from ads, movies, dramas and variety shows received by idols. Customers are brought into these channels through the idols’ popularity. C-side payments mainly refers to fans’ purchase of idol music albums or concert tickets.
Banana Entertainment, which became famous thanks to Wang Sicong, the founder of entertainment agency Banana Culture, has been focusing on producing Korean style idol groups. According to AI Finance News, Banana Entertainment planed to launch its own idol variety show this year even before the success of Idol Producer and Produce 101. The plan called for the training of second and third groups even in the event of an ordinary market response.
“Chinese parents will not allow children to spend the six or seven years training at an entertainment company the way Korean children do,” said Xu Ningna, director of Banana Entertainment, “We must test them in the market at the early stage. If they are not suitable, it is better to know sooner rather than later.”
Guojin Securities said the core of the idol-fan industry in Japan is “cultivation,” and that organizers constant focus on the concept of developing new boy groups or girl groups and finding ways to profit off them.
Some fans begin to support idols when they are new. After their debut, they purchase related material featuring the idol, such as albums and magazines, TV shows, movies, concert tickets and support events.
According to Zhang Zhanhao, CEO of Shanghai Cherry Cultural Media, the Japanese and Korean markets have verified that the idol economy is a reproducible business model.
Regardless of Japanese or Korean style, brokerage firms appear confident that the idol industry will eventually break out.
Featured Image Source: Internet.